The Organization of the Petroleum Exporting Countries (OPEC) has said that oil utilization would grow faster in the year 2018 than previous year due to strong and expected world economy improvement.

The organization had cut its estimate of 2018 supply from non-OPEC producers.

OPEC said the world would need 33.42 million barrels per day (bpd) of OPEC crude next year, up 360,000 bpd from its previous forecast and marking the fourth consecutive monthly increase in the projection from its first estimate made in July.

OPEC raised its forecast for demand for its oil in 2018 and said its deal with other producers to cut output was reducing excess oil in storage, potentially pushing the global market into a larger deficit next year.

According to the report, Oil prices, which are close to their highest since 2015, rose further towards $64 a barrel after the report was issued. Crude is still about half its level of mid-2014 when a build-up of excess supply led to a price collapse.

The 14-country producer group said its oil output in October, as assessed by secondary sources, was below the 2018 demand forecast at 32.59 million bpd, a drop of about 150,000 bpd from September.

OPEC production figures mean compliance with the supply cut by the 11 members with output targets has risen above 100 percent from 98 percent initially reported in September, according to a Reuters calculation.

“The high conformity levels of participating OPEC and non-OPEC producing countries … have clearly played a key role in supporting stability in the oil market and placing it on a more sustainable path,” the report said.

In a further sign, supply excess is easing, OPEC said inventories in developed economies declined by 23.6 million barrels in September to 2.985 billion barrels, 154 million barrels above the five-year average. The excess overhang has fallen considerably,” said OPEC, which aims to reduce stocks to the five-year average through the supply-curbing deal.

And in another forecast moving in OPEC’s favor, the report lowered its estimate of supply growth from non-OPEC countries next year. It now sees a rise of 870,000 bpd, down 70,000 bpd from the previous forecast. OPEC cited downward adjustments to Mexico and Norway for the revision.

Demand Boost

OPEC expects oil demand to rise by 1.51 million bpd next year, up 130,000 bpd from previously, to 98.45 million bpd. World economic growth is seen accelerating to 3.7 per cent, up from 3.5 percent in the previous forecast.

And in another forecast moving in OPEC’s favour, the report lowered its estimate of supply growth from non-OPEC countries next year. It now sees a rise of 870,000 bpd, down 70,000 bpd from the previous forecast. OPEC cited downward adjustments to Mexico and Norway for the revision.

Last month’s report pointed to a smaller deficit of about 310,000 bpd.